In truth, not much is likely to change once HBOS disappears from view and the flag bearing Lloyds TSB's black horse is flying above the Mound. Banking in Scotland may even become more competitive, more expansive.

But did this deal have to happen at all?

The demise of HBOS was swift, if not entirely shocking. It had been wobbling for some time, but was it beyond redemption?

It became the highest-profile victim of the three-day hurricane that shook the foundations of Scottish banking and left one independent Scottish bank still standing.

With no evidence that HBOS was capable of repairing wounds that were partially self-inflicted, it had to be rescued to avoid it suffering a worse fate. The pain of Northern Rock and Lehman Brothers was too much to contemplate.

But could HBOS have received some temporary protective shelter from the Government until the storm passed? The actions from the Financial Services Authority to temporarily ban short-selling in financial stocks came too late. Gordon Brown and Alistair Darling appeared to put self-interest before all else by contenting themselves with saving jobs in their constituencies ahead of an important by-election and the Labour conference.

In theory, the HBOS board could hand over the £120m break fee and walk away from the deal, although without strong support from institutional shareholders for such a rebellion, that is a long shot. In the current climate, we are likely to see more mergers of this sort, not fewer. A counter-bid, however, would be encouraged by those who feel they are being short-changed.

The delay by both sides in issuing a statement to the market once news of a deal was leaked has caused widespread concern of potential market abuse. This newspaper quizzed both Andy Hornby, the HBOS chief executive, and Sir Victor Blank, chairman of Lloyds TSB, at Thursday's press conference, only to be told that both banks acted within the normal rules of protocol.

Really? It was just after 9am on Wednesday when the BBC confirmed speculation in the market that the two sides were in talks. But the statement from the banks did not emerge until 1.25pm.

In that time the markets went haywire and investors were left at the mercy of the short-sellers and other big players who were making a killing in the shares.

As for the poor old employees and small shareholders, they didn't stand a chance. The hedge funds made a mint and Scotland lost a banking headquarters.

The banks say they acted "expeditiously". Let's hope they are more fleet of foot in their day-to-day operations.

That aside, the takeover of HBOS was a topic of conversation for some months. The raid on the shares in March was fuelled by rumours that it had funding problems. Well, it did.

It was not in rude health, nor did the short-sellers bring it down. They simply made what was already a weak situation worse.

Hornby claimed the bank had access to funds and that his desire to do a deal was fuelled more by fears of a complete meltdown in investor confidence.

But don't the two go hand in hand? HBOS was facing a big task raising the huge sums it required in a market shorn of capital. A lot of shareholders knew that, including those in long positions who were also sellers last week.

As well as the loss of a bank, the saga of the past week has raised concerns over who is in control and whether the politicians are just making up the rules as we go along. There will certainly be changes to the regulatory regime, which should begin with sorting out who among them takes full control.

Not that any of this would necessarily have saved HBOS, which probably got what it deserved under a management that threw money at housebuyers after borrowing heavily from other banks in the process.

The new Lloyds-HBOS, or whatever it will be called, wants us to believe that it will turn out better for Scotland. But despite its pledges of support, it is apparent that Edinburgh is shifting to the fringe of this particular banking empire.

Sir Victor Blank is understood to have coveted the merger for at least two years and will have none of this talk about diminishing the Scottish operations.

Let's see if he puts his money and his commitment where his mouth is and provides Scotland with a bank that can restore some pride.

The truth is that HBOS was only headquartered in Edinburgh in name, and in law. It was always a divisional and operational centre and will continue to be so under Lloyds TSB.

It would, however, be folly to beat the national drum too hard. We are, after all, in a global economy in which others – RBS, Jim McColl's Clyde Blowers, and FirstGroup – are among those that have expanded overseas through acquisition.

To that extent HBOS was merely playing the same game.

Unfortunately, it lost.